______
Checklist for Determining Worker Classification
Although it is necessary to consider all the facts and circumstances of a work arrangement, the IRS generally accords more weight to the factors in the first four questions of this checklist. If the answers to questions 1 through 4 are “Yes”, the IRS has created a strong presumption that the individual is an employee. If the answers to questions 1 through 4 are “No”, it may be appropriate to pay the individual as an independent contractor.
Yes
/No
/N/A
1. / Is the person integrated into Purdue’s staff? In other words, is he/she essential to the completion of daily operations? / ______/ ______/ ______2. / Does Purdue provide instructions as to
a. where the work is performed? / ______/ ______/ ______
b. what hours will be worked? / ______/ ______/ ______
c. how the work is performed? / ______/ ______/ ______
3. / Does Purdue provide the workstation for the person and most or all of the tools, materials and supplies needed to perform the work? / ______/ ______/ ______
4. / Does Purdue control (or have the right to control) not only the result of the work but also the method of work? / ______/ ______/ ______
5. / Is the individual paid a set salary or wage for a workday, rather than a per-job or per-hour-of-work basis? / ______/ ______/ ______
6. / Can Purdue discharge the person without legal liability or risk of a breach-of-contract suit? / ______/ ______/ ______
7. / Does Purdue provide:
a. training for the person? / ______/ ______/ ______
b. other persons to assist the service provider in performing the work? / ______/ ______/ ______
8. / Is the working relationship continuing, even if it is irregular or infrequent? / ______/ ______/ ______
9. / Does Purdue assume all risk of monetary loss on the project (no chance that service provider will lose money)? / ______/ ______/ ______
10. / Is the person performing the type of work only for Purdue (not for any other clients)? / ______/ ______/ ______
11. / Does the person currently work for Purdue as an employee? / ______/ ______/ ______
12. / Does Purdue expect to hire the person as an employee immediately following the termination of his or her services as an independent contractor? / ______/ ______/ ______
13. / During the 12 months prior to starting the service, was the person on the Purdue Payroll (regular or temporary)? / ______/ ______/ ______
A “Yes” answer to any of the above questions suggests employee status. A “No” answer suggests independent contractor status. Please note that worker classification problems (and related tax liabilities) are primarily due to inappropriate independent contractor classifications. If the answers to questions 1 through 4 are mixed, the remaining answers should strongly support independent contractor status to make payment as an independent contractor through Accounts Payable. When in doubt, the safe approach is to classify the worker as an employee and make payments through Payroll.
The tax laws on worker classification apply regardless of funding source or procurement method. If you have any questions or would like assistance in making classification decisions, please contact the Tax Group.
After completing this form, you may retain it in your area and document the determination on the Form 21 and Form 56.